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Maddox v. Olshan Foundation Repair and Waterproofing Co. of Nashville, L.P.

Court of Appeals of Tennessee, Nashville

September 18, 2019

RACHEL MADDOX
v.
OLSHAN FOUNDATION REPAIR AND WATERPROOFING CO. OF NASHVILLE, L.P., ET AL.

          Session: May 7, 2019

          Appeal from the Chancery Court for Davidson County No. 12-657-I Claudia Bonnyman, Chancellor

         This appeal involves a homeowner's fraud claim against a foundation repair company. The trial court rejected the foundation repair company's argument that the fraud claim was barred by the statute of limitations and the statute of repose. After a three-day bench trial, the trial court found that the foundation repair company had engaged in fraud. Specifically, the trial court found that the foundation repair company sold its systems to the homeowner representing that they would stabilize her house from further movement when in reality it did not have the knowledge or understanding to design an effective solution for the house and "simply did not really care" whether the systems would be effective in any way. The trial court further found that the company fraudulently misrepresented whether an engineer would be involved in the process and whether it would obtain a permit for the work. The home had been condemned by the time of trial, and the trial court awarded the homeowner $187,000 for the loss of the value of the structure. Based on the reckless and fraudulent conduct of the foundation repair company, the trial court also awarded $15,000 in punitive damages to the homeowner. The foundation repair company appeals. We affirm as modified.

         Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed as Modified

          Kevin C. Baltz and C.E. Hunter Brush, Nashville, Tennessee, for the appellant, Olshan Foundation Repair and Waterproofing Company of Nashville, LP.

          Jean Dyer Harrison, Nashville, Tennessee, for the appellee, Rachel Maddox.

          Carma Dennis McGee, J., delivered the opinion of the court, in which Richard H. Dinkins, J., and J. Steven Stafford, P.J., W.S., joined.

          OPINION

          CARMA DENNIS MCGEE, JUDGE.

         I. Facts & Procedural History

         Rachel Reeves (now Maddox) purchased a home in West Nashville on January 31, 2003. The purchase price of the home was $170,000. The two-acre lot where the house was situated was very steep, with a steep driveway leading up to the home. The lot continued to slope steeply upward behind the home toward an adjacent property at the top of the hill. When the home was built in the 1970s, the builders excavated into the hillside and spread the excavated soil out in front to make a level building pad. This was typical for that time period and for that area of Nashville, as several other homes in the area have similar site conditions on hilly terrain.

         The home itself was a modified A-frame structure with three bedrooms and a loft. It consisted of three stories, with the lowest level constructed like a basement except that it was not fully underground. The lowest level had concrete block foundation walls and a slab floor, and one side of it was used as a two-car garage. The upper stories were wood framed and sided. These levels had "two-story glass" along the front of the house with a view of the valley below. The home also had large decks on the front and back of the house.[1]

         The home was in good condition when Ms. Maddox purchased it, with no visible defects noted by either Ms. Maddox or her home inspector. In late 2004, however, Ms. Maddox started noticing some problems with the home. During heavy rains, water "bubbled up under the foundation" at the front of the house. In addition, Ms. Maddox noticed some "hairline cracking" in the garage side of the lowest level and some even finer cracking in the other side of the basement. Ms. Maddox was not overly concerned and attributed the cracking to settlement.

         In early 2005, the cracks in the basement level appeared a little larger, up to a quarter of an inch in width, and cracks began to appear in the blocks of the brick wall. Ms. Maddox also began to sense, for the first time, that her home was "tilting" downhill. If a tennis ball was placed on the floor, it would roll toward the front of the house. Ms. Maddox decided to find someone with foundational expertise to inspect the property in order to determine if the issues were normal settlement or something more.

         Ms. Maddox had seen a television commercial for Olshan Foundation Repair and Waterproofing Company advertising a lifetime warranty, so she contacted Olshan in May 2005. Olshan sent Kevin Hayman to Ms. Maddox's property. Olshan's documents described Mr. Hayman as a "certified structural technician." Ms. Maddox toured the property with Mr. Hayman and showed him the tilting in the front room of the house, the cracks in the basement floor, the stair-stepping cracks in the basement walls, and the area where she had observed bubbling around the front of the foundation when it rained. Mr. Hayman also pointed out that the back wall of the home was "bowing" inward. Mr. Hayman assured Ms. Maddox that Olshan employees had advanced training and handled these types of issues all the time.

         Mr. Hayman described three systems recommended by Olshan to stabilize the house. First, Olshan would use its Cable Lock system to support the front part of the home's foundation with pillars. Olshan's brochure provided the following explanation of its Cable Lock system:

The installation process involves individual sections of concrete being driven to depths of up to 90 feet beneath your foundation and locked together by the cable. The cable makes the difference. When the last piling is installed and the cap is set in place directly under the footing, you know your home is secure. No other foundation repair method can do this. The cable makes the Cable Lock' System superior to all pressed piling systems and is 3 ½ times more reliable than concrete piers. The lifetime transferable warranty that comes with the Cable Lock' method of repair is even better than our convenient, reliable and superior system. That lifetime warranty means something when it is backed by over 70 years of experience.

         The brochure stated that the Cable Lock system would be custom fitted for each home, and the "[e]ngineered" Cable Lock system rotated 360 degrees every four feet. It stated, "City inspectors, engineers and you personally can verify job performance." The brochure further provided, "Every Cable Lock installation lasts a lifetime – it's backed by a lifetime transferable warranty from Olshan. Areas repaired with Cable Lock' are covered against future settlement – forever."

         The second system recommended by Mr. Hayman was called the Wall Lock system. Mr. Hayman explained to Ms. Maddox that this system would essentially stabilize the house by taking pressure off the back wall that was bowing inward and returning it to its original position. He explained that Olshan would drill through the back wall and place anchors "in the earth" behind the house to secure the wall. The Olshan brochure further explained that the Wall Lock system was a form of "tie back" system in which tie backs were installed at an angle reaching from the interior of the wall into "virgin soil" outside the wall. The brochure stated that the Wall Lock system would be "proven and tested when installed" and also "backed by a lifetime warranty from a company with over 70 years of experience."

         Finally, Mr. Hayman recommended Olshan's Water Lock system to address the home's water issues, prevent water from coming into the house, and help stabilize the home. The brochure explained that Olshan employees would break through the concrete and dig down to the footer, drill weep holes, and install Water Lock pipe, before replacing all concrete and leveling the floor. The brochure stated that the Water Lock system was "designed to stop water from entering permanently," and "[t]he Water Lock' lifetime warranty ensures you will be protected… forever." It stated, "Olshan proudly stands behind each and every repair just as we have been doing for the last seven decades."

         Ms. Maddox believed that Mr. Hayman was going to consult with an engineer to ensure that these recommendations were appropriate. Mr. Hayman returned to the home at a later date with an Olshan manager and a computer-generated drawing of the home depicting the locations where the three systems would be installed. A circular stamp or seal appeared on the drawing with the words, "Kevin Hayman, Certified Structural Technician." Mr. Hayman and the manager discussed their proposal with Ms. Maddox and assured her that these systems would fix the home's structural issues. Ms. Maddox contracted with Olshan for the installation of all three systems at her home at a total cost of $27,000. She signed a written contract on August 29, 2005. The contract stated that Olshan would furnish a "BEC engineering letter" after the work was completed. It also stated, "Work permitted to meet local government requirements."

         Olshan installed the systems at Ms. Maddox's home over the course of three days in October 2005. Olshan did not install as many pilings as it originally proposed because the steel supporting the front deck started to bend, so Ms. Maddox was only required to pay $23,700 of the original contract price of $27,000. In March 2006, Kevin Hayman provided Ms. Maddox with the "BEC engineering letter" mentioned in the contract, and he also gave Ms. Maddox certificates reflecting specific terms for the lifetime warranties on the systems. The certificate for the Cable Lock Lifetime Foundation Warranty stated that if any "adjustments" were required during the life of the home due to settling, Olshan would re-raise or adjust all areas previously underpinned without cost to the owner. The certificate for the Wall Lock system stated that if any adjustments were required during the life of the home, Olshan would "re-tighten all areas previously repaired" without cost to the owner. The certificate for the Water Lock system stated that if any water from the wall or the wall floor joint passed through the perimeter water control system and onto the basement floor, Olshan would "provide the additional labor and materials to fix the leak at no additional cost to the owner."

The BEC engineering letter Mr. Hayman provided to Ms. Maddox stated:
March 7, 2006
Olshan Foundation Repair
19 Cleveland Ave.
Nashville, TN. 37210
Subject: Review of Foundation Repairs at 530 Hickory Trail Dr., Nashville, TN. 37209
BEC Engineering, Inc. (BEC) has reviewed the subject foundation repairs that were made to the above referenced residence. Olshan Foundation Repair and Waterproofing presented the repaired portion of the foundation using 13 segmental pre-cast Cable Lock' concrete piles, 6 wall lock soil anchors (Manta Rays) and 42 linear feet of interior water lock, and an automatic sump pump at the above referenced location for BEC's review. The repairs were found to be in general compliance with industry standards, and in accordance with Olshan Foundation Repair's proposal.
In BEC's opinion, the repairs as reported are adequate for this type of structure and for the area where the work is being performed. The repair work performed to the subject location is believed to have been acceptably completed in accordance with good industry practice for this type or repair.
The future performance of the foundation system on the subject location should be as intended. Repairs to concrete and masonry surfaces should be made as soon as possible to help prevent moisture and insect intrusion. Soils should be graded such that there is positive drainage away from the foundation to prevent water from ponding around the foundation system.
BEC appreciates being of service. If you have any questions or require additional information please contact the undersigned.
Regards,
Adrian Farr, P.E.
BEC Engineering, LP

         Mr. Farr attached to his letter the computer-generated drawing originally prepared by Kevin Hayman. Along with the original circular stamp or seal stating, "Kevin Hayman – Certified Structural Technician," this drawing had an additional seal that stated, "Adrian L. Farr – Registered Engineer – State of Tennessee." A handwritten notation beside his seal stated, "Recommendations are based on limited visual survey." Thus, Ms. Maddox believed that the engineer had reviewed the repairs to her home, found them appropriate from an engineering standpoint, and concluded that the home was secure.

         Olshan returned to Ms. Maddox's home later in 2006 and adjusted the foundation pilings and the wall anchors. This first visit was initiated by Olshan. During the visit, Olshan's employee informed Ms. Maddox that he needed to make some adjustments to the systems. Ms. Maddox could "feel the tilting" and saw that some of the cracks were slowly progressing. She had also observed water bubbling up underneath the slab when it rained. However, the 2006 adjustment fixed the tilt in the home at least temporarily.

         In 2007, Ms. Maddox called Olshan to return to the home. Olshan adjusted the pilings and the wall anchors again. Once again, the adjustments fixed the tilt in the home for the time being. Ms. Maddox refinanced her home in 2008 and made several upgrades to the interior.

         In May 2010, Nashville experienced an historic flood. Ms. Maddox's home was not flooded due to the steep slope of her property, but she observed a surge of water coming from underneath the house. After the flood, she also noticed a significant tilt in her home. She called Olshan again, on May 18, 2010, to report the problem. Olshan sent a representative to the home in June 2010 who tightened the wall anchors and adjusted several pilings.

         In November 2010, Ms. Maddox called Olshan again because she noticed new cracks and believed that the tilt in the house was "becoming increasingly more dramatic." Ms. Maddox was in and out of the hospital during this time and did not physically observe anyone adjusting the systems, but Olshan assured Ms. Maddox that it would send out a representative and that "it would be fine." Ms. Maddox called Olshan again in December 2010 because the cracks had progressed from moderate to more significant, and she again detected the tilting. She reported that she could "see daylight" through the cracks. Olshan sent someone to the property in January 2011.

         An Olshan work record indicates that its employees returned to the home again in March 2011 to adjust the pilings. The record states, "Opened pilings 2 and 3 but the footer is cracked and it seems to be walking away from the rest of the house." The record states that the homeowner was not present but that the worker notified the Olshan manager. However, no one ever informed Ms. Maddox about the cracked footer.[2] She continued to make improvements to the home throughout this time period.

         Ms. Maddox called Olshan again in August 2011. In response, an Olshan representative returned to the home to perform some sealing and caulking. On or around August 22, an Olshan employee was present at the property and told Ms. Maddox, "Cannot fix. Call office." The representative spoke "very broken English" and could not answer Ms. Maddox's questions. After this conversation, Ms. Maddox made repeated attempts to contact Olshan, but she was unsuccessful, and no one from the office would return her calls.

         By late 2011, Ms. Maddox became very concerned and contacted an engineer, Larry McClanahan, to inspect the home. According to Ms. Maddox, Mr. McClanahan told her that the foundation work performed by Olshan actually made the issues at the house worse. He informed her that the Olshan system was not working as intended and would never have worked. Mr. McClanahan informed Ms. Maddox that there was an immediate need to stabilize the structure before proceeding with a more thorough investigation of the conditions. He made some sort of recommendation for proceeding, but it was going to cost over $30,000, and Ms. Maddox was unable to afford the additional cost.

         Ms. Maddox consulted with other engineers to seek a second opinion and determine whether the cost suggested by Mr. McClanahan was truly necessary. Ms. Maddox also continued to call Olshan repeatedly but to no avail. Ms. Maddox also had family members call on her behalf, but Olshan representatives would not return her calls. Ms. Maddox estimated that she called Olshan twenty to thirty times.

         On May 3, 2012, roughly eight months after the Olshan employee told Ms. Maddox that he could not fix the house and left the property for the last time, Ms. Maddox filed this lawsuit against Olshan in the chancery court of Davidson County. Her complaint recounted the facts regarding Olshan's installation of the three systems at her home and alleged that the problems she had experienced since that time rendered the home "barely habitable" and "potentially unlivable." She alleged that the cracks in the foundation had expanded to over an inch wide and that the home was in danger of further structural failure that would in fact render the home uninhabitable. Ms. Maddox contended that Olshan knowingly or recklessly sold her products that were "neither needed nor effective" and ultimately caused additional harm to the home. She alleged that Olshan's systems could not perform as guaranteed and included a warranty that was essentially worthless and provided no protection at all. Ms. Maddox alleged that Olshan represented that it was uniquely skilled and had the best technology available to fix the home, fraudulently inducing her to purchase systems that were not needed and could not work. Ms. Maddox asserted claims for breach of warranty and common law fraud. She estimated that it would cost over $100,000 to repair the home and sought damages in an amount equal to the cost to repair plus all costs and expenses associated with ascertaining those damages. She also sought an award of punitive damages due to the misrepresentation and intentional conduct.

         While the case was pending, in April 2013, Ms. Maddox was inside her home during a rainstorm and heard loud cracking sounds coming from outside. Ms. Maddox went outside and saw that a tree had split and was about to fall on her home. She immediately left the home in her pajamas with only her purse and her dog. The tree eventually fell and brought another tree down with it, and both trees struck the home. Ms. Maddox never resided in the home again after this date.

         Ms. Maddox talked to several engineers regarding repairs, but she was told that there was nothing that could be done at that point because she had "missed that window." She tried unsuccessfully to get contractors to work on the house. Pictures of the property taken around this time indicate that the walls were bowing and the wall anchors installed by Olshan had turned sideways or at an angle due to the pressure. At least one crack in the basement wall was wide enough that one could see "daylight" and look out into the yard from the interior of the home. Stair-stepping cracks extended through the whole corner of the front left side of the house. The soil had eroded around the foundation to the point that the base of the foundation was clearly visible in some areas, and the sewer line passing under the footing was also clearly visible. At the bottom of the steel post supporting the overhanging deck, there was an obvious gap where the concrete had "settled out from under the post" and was no longer supporting it. In the living area upstairs, cracks extended from the tops of the doorframes, and the drywall had begun to separate. The chimney line above the fireplace was no longer straight and indicated a visible shift.

         According to the chief building inspector for Metro Codes in Nashville and Davidson County, who visited the home around this time, there were cracks in the walls and foundation, the doors were twisted "out of plumb," the garage door on the side of the home was no longer straight, and the home appeared to be "sliding off of the hill" on which it was built. In his opinion, the home was unsafe for habitation and probably would have qualified for demolition at that point. However, he did not officially post the house as unsafe because homeowners are usually given some initial opportunity to decide whether to pursue repairs, and he spoke with an engineer retained by Ms. Maddox who indicated that she was investigating the possibility of repairs.

         Ms. Maddox had to pay "high-risk movers" to recover what little they could from the home. She sought to recover under her home insurance policy, but she was only paid around $16,000 for damage to the roof and gutters, and she was not compensated with respect to the condition of the structure itself. Ms. Maddox amended her complaint to allege facts regarding the further deterioration of the home, to add a fraud claim against BEC Engineering, LP, and to add additional allegations of fraudulent conduct on the part of Olshan. She alleged that Olshan fraudulently misrepresented that the work had been reviewed and approved by an engineer when in fact no engineer ever viewed her home. Ms. Maddox alleged that the BEC engineer who provided the letter regarding her property lived in Texas and never visited the site. She alleged that if Olshan had actually retained an engineer to inspect her property, Olshan would have learned that the home was in grave danger and needed very specific repairs due to unstable soils on the property. Ms. Maddox alleged that Olshan's products could not work on unstable soil and that this fact would have been readily apparent to any expert in the field who examined the home. She claimed that Olshan's actions caused additional harm by leading her to believe that the home had been stabilized, when in fact the Olshan systems had no such effect, preventing her from performing the necessary repairs before the home was irredeemably damaged. Ms. Maddox claimed that her home had become uninhabitable and "a total loss" that could not be repaired "in any commercially feasible manner." She sought compensatory damages for the value of the home in addition to consequential and incidental damages. Thereafter, in February 2016, the city codes department posted a sign on the property officially designating it as "unsafe due to foundation failure and unstable soil."

         The trial court entered a default judgment against BEC Engineering and reserved the issue of damages for trial. However, the trial court ultimately concluded that BEC Engineering was not so connected to the events at issue that it was responsible for Ms. Maddox's damages. As a result, the claims against BEC Engineering were dismissed. This ruling is not challenged on appeal.

         The trial court held a three-day bench trial in August 2017 on the claims against Olshan for fraud and breach of warranty. The trial court heard testimony from Ms. Maddox; Byron Hall, Chief Building Inspector for Metro Codes in Nashville and Davidson County; Richard Courtney, a real estate broker; Jerry Michael Vines, Jr., structural engineer and expert witness for Ms. Maddox; Susan Bryan, a partner in Olshan of Nashville; and Keith Michael Garman, geotechnical engineer and expert witness for Olshan.

         Ms. Maddox described the condition of her home at the time of trial as "very sad" and "a disaster." She explained that she cannot legally enter the home, and she had been advised that the home could slide down the hill at any minute. The doors are bowed to the point that the home cannot be locked. She believed that the home was worth nothing in its current condition. Ms. Maddox explained that there was nothing she could do with the property because she had tried unsuccessfully to sell it, and she was not permitted to rent it or build on the property.

         Ms. Maddox had originally purchased the home for $170,000 in 2003. She refinanced in 2008 to pay for "upgrades" to the home, and at the time of trial, she still owed $170,219 on the home. She continued to pay $1900 per month for her mortgage payment even though she had not lived in the home in six years. Ms. Maddox introduced the property tax records for the home reflecting its appraised and assessed value for every year since 2005, when Olshan worked on the home. According to these tax records, in 2005, the total appraised value of the property was $162,300, with a land value of $35,000 and an improvement value of $127,300. The total appraised value had risen to $203,700 in 2009. However, it substantially decreased in 2011 and later years, and the total appraised value for 2017 was only $13,400, with $11,400 of that amount being attributable to the land, and only $2,000 being attributed to the structure.

         Ms. Maddox testified about the sales price of several comparable homes on her street and in her neighborhood in the past few years. She calculated the average price per square foot for these sales. Using this figure, she estimated that when the trees fell on her home in 2013, the home would have been worth about $230,000, conservatively, if it had been in good condition. After that date, and through the time of trial, Ms. Maddox believed that her home had zero value. She had believed that her home was "fixable" before that date, but after that date, she did not, based on what she was told by several engineers about the possibility of repairs.

         Ms. Maddox had met twice with Byron Hall, the Chief Building Inspector for Metro Codes in Nashville and Davidson County. Mr. Hall also testified at trial. He had visited Ms. Maddox's home four or five times, beginning in 2013 after the trees fell and most recently during the week before trial. As a result of his last visit, Mr. Hall turned the property over to the Property Standards Division of the Codes Department to be inspected and recommended for demolition. He explained that a property qualifies for demolition if the cost of repairs would exceed fifty percent of the amount the property would be worth in a repaired state. He noted that the property tax assessor valued this structure at only $2,000 and had obviously "written it off." He also noted that the 2013 value of the structure, according to the tax assessor, was $37,700, and it would not have been possible to repair the home for $18,500 even at that point.

         Mr. Hall testified that the home now has cracks in all of the basement walls, with the widest spanning approximately two inches or more. At the front corner of the house, the concrete was exposed and cracked and appeared to be sinking or sliding to the low side. The ground was washing away from the footing, leaving a space beneath it wide enough for someone to reach his or her arm under the footing. The bottom of the footing was supposed to be at least twelve inches below finished grade. Mr. Hall deemed the home an imminent threat to public health and safety.

         Mr. Hall explained that Ms. Maddox's lot has a slope of approximately 33 to 35 percent, which is difficult for building because of drainage issues and the condition of the ground itself. Such steep lots are deemed "critical lots" by the codes department, and new construction on such lots is typically overseen by the stormwater division. Mr. Hall acknowledged that he had never inspected the systems installed by Olshan, but, he added, that was "[p]art of the problem we had[.]" Mr. Hall explained that the city requires permits for that type of work, and Olshan had never pulled any permits or asked for inspections. He said, "If you're dealing with a foundation of a piece of property, there's a permit required. We require a permit to do no more than dig – to excavate soil back and put waterproofing on the basement. . . . So . . . anytime that the work is done to the foundation of a home, it requires a permit." The language of the relevant city ordinance required a permit for anyone desiring to "construct, alter, repair, enlarge, move or demolish any building or structure or part thereof[.]"

         On cross-examination, Mr. Hall acknowledged that city ordinances provide an exception for "normal maintenance repairs." The relevant ordinance provided:

16.28.030 - Normal maintenance repair-Permits not required.
. . . .
Normal maintenance repairs shall be defined as repairs to an existing building or structure, including but not limited to exterior and interior painting, papering, glazing of windows and doors, floor finishing, minor repairs to chimneys, stairs, porches, underpinning and repairs to an existing roof not to exceed thirty-three percent of the roof area.

         However, Mr. Hall insisted that the type of work done in this case, involving "jacking up the structure," jackhammering concrete to install a drain, and installing wall anchors, was not "[n]ormal maintenance repair" or even underpinning. Mr. Hall described underpinning as something used on modular buildings or trailers. He said this was his interpretation of the ordinance and that of the department's director, and an appeal would have to be taken to the board of appeals in order to overturn it. He also said that the department was in the process of having the word "underpinning" removed from the definition because many foundation companies were doing work without permits and claiming that their work was exempted by that term. He explained that contractors were expected to comply with the code but that this provided "a way around a permit for some of the contractors." On occasions when the codes department learned that foundation companies were proceeding without permits, they required the companies to obtain them or issued a stop work order.

         Mr. Hall testified that if the codes department had been involved with the repairs to the Maddox property, it would have required not only a permit for this work, but also the involvement of an engineer, due to the conditions at the property. He also said that the department would have required the engineer to be on-site to perform the review.

         Ms. Maddox also presented the testimony of Richard Courtney as an expert in real estate. Mr. Courtney had been a real estate broker for 39 years and sold about 1500 homes, mainly in the Nashville area. He visited Ms. Maddox's property at least twice, including once on the morning of his testimony. However, he had not been inside the house because it had been condemned and was posted with a sign. He opined that if the house had been "in perfect condition," it would have been valued at around $152 per square foot. Mr. Courtney testified that two homes on Ms. Maddox's street were sold in the current calendar year, one for $152 per square foot and another for $132 per square foot. Based on the square footage of Ms. Maddox's home, he estimated that her home would be worth $234,000 to $254,000 if in good condition. In its current state, considering the extent of necessary repairs, Mr. Courtney believed that the home had no value. He also explained that new construction on the lot would be cost prohibitive because a builder could not purchase the property and build another house on it and make any profit.

         Ms. Maddox presented additional expert testimony from Jerry Michael Vines, Jr., a structural engineer. (The trial court would later describe Mr. Vines as "a credible and very knowledgeable witness.") Mr. Vines had been a registered professional engineer for nearly twenty years, and he was licensed in four states. He had worked with foundation companies on homes with unusual or difficult conditions like those present at the Maddox property.

         Mr. Vines had visited Ms. Maddox's home at least twice. He found it obvious that the house had settled along the front end and that the earth pressure on the back side of the house was pushing on the foundation walls, causing bowing and cracking. He said the pressure had continued to the point that horizontal cracks formed and extended the length of the rear basement wall, the garage doors were leaning, and the tops of the walls were leaning out farther than the bases of the walls. The interior support columns were leaning three inches toward the front of the home, indicating significant foundation settlement and lateral pressure on the house.

         Mr. Vines had examined the locations where the three systems were installed by Olshan. He testified that the Wall Lock anchors had continued to move since installation. Mr. Vines coordinated with a contractor and laborers for excavation of one of the anchors to determine how it was installed. Once the anchor system was exposed, he discovered that it only extended approximately six feet into the soil beyond the wall, and the pivoting anchor head that was designed to pivot and anchor into the soil was not even engaged. It was still flat and parallel with the rod. Mr. Vines explained that with the anchor head unengaged, there was no way for the anchor to provide any significant resistance.

         According to Mr. Vines, earth anchor systems are not "generic" or "one-size-fits-all" systems, and they should be engineered from the very beginning. He said you have to make sure you extend the anchors beyond any existing soil movement to reach into stable ground in order to provide resistance and sufficient tensile force to brace the wall. He explained that certain angles are required depending on specific soil conditions at the site, and an engineer is needed to calculate how deep the anchor should extend. When installing wall anchors, he said, you can't just "drill the hole and go for it." Rather, you need specific information on numerous variables, including soil conditions, the height of the wall, the height of the soil behind the wall, the pressure on the ...


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